Child care workers are disappearing and it’s hurting the whole economy

And now it’s starting to go back.

Workforce reductions – coupled with the continued challenges of low wages and unequal benefits for workers – have economists and policy experts sounding the alarm: if this industry falters further, it could cause problems to the entire labor market as working parents scramble to find care for their children.

“Now that we are seeing a decrease [in employment]this should be concerning for many people who rely on these services,” said Caitlin McLean, director of multistate and international programs at the Center for the Study of Child Care Employment at the University of California, Berkeley.

“It absolutely contributes to the broader shortage of workers that we are seeing,” she added.

Every time a classroom goes virtual, a daycare limits enrollment or a daycare closes, parents — usually mothers — can’t go to work, she explained.

The child care industry was “barely getting by before the pandemic,” she said. “And now it’s really at a breaking point.”

Shortage of childcare workers

The situation has only been exacerbated by the pandemic.

“It’s hard work at the best of times,” said Wells Fargo senior economist Sarah House, adding that “we’re here in a pandemic.”

Heightened health risks, ever-changing regulations and inflationary pressures have heightened concerns for child care providers.

“It’s definitely different now than it was two or three years ago, from a vendor perspective,” said Lisa Keller, who runs a home daycare in Horace, North Dakota. “You have your difficult and stressful days, but now you hear a child coughing [and you wonder if] this kid has a cold, and it’s okay, or we could shut down for 20 days.”

A new academic working paper released earlier this month found that disruptions to school and childcare services are leading to reduced working hours for parents. Daycare closures have also disproportionately affected low-income families, according to research by Kairon Shayne D. Garcia and Benjamin W. Cowan of Washington State University.
Disruptions to childcare operations can have lasting consequences for the labor supply and careers of working parents, House said.

“We’re almost two years away, and I think the longer it takes, and you don’t have that option [to return to work]it becomes more than just a temporary exit or a temporary break from the labor force,” she said.

Raising Workers’ Wages Presents a Trap

One of the biggest challenges that existed for Keller before the pandemic remains true today: finding help when needed is difficult.

“You put it out there, ‘You’re looking for part-time help,’ and a lot of the time nobody even answers,” she said. “I don’t know if it’s related to [Covid] exhibition or with remuneration. I don’t even know what the biggest problem is.”

Child care workers have long been underpaid and receive fewer benefits like health insurance, according to a November 2021 report from the Economic Policy Institute.

On average, child care workers in the United States are paid $13.51 an hour, according to the EPI analysis. That’s almost half of what an average American worker earns, at $27.31 an hour.

This often means child care workers cannot afford to support themselves or their families, leading to higher turnover rates, declining quality of care and increased risk for cities to become child care deserts, EPI found.

Childcare hiring crisis is closing programs and keeping parents out of work

Better pay would improve workers’ financial security, increase employee retention, and ultimately lead to a stronger economy, according to the analysis. The PPE suggests a minimum hourly wage between $21.11 and $25.95 per hour.

However, rising wages create a potential Catch-22: It could drive up child care costs, and those expenses are already one of the largest for families in the United States.

“I know a lot of people think daycare is expensive, and that’s for the parents, [but] so we don’t make a ton of money either,” Keller said. “So to hire somebody, you have to have more kids, so you can pay them, and it gets tough that way — making sure you can find the children so you can afford the help, but you need help because you can only have a limited number of children. It’s a balancing act.”

The solution, said Elise Gould, senior economist at EPI and one of the authors of the November 2021 analysis, is greater government involvement. This could include universal pre-kindergarten, financial support for providers as well as subsidies for families, “with provisions guaranteeing higher wages and better working conditions for workers,” Gould said.

“It could happen at the federal level, but there’s no reason the state and localities can’t pick up on those efforts,” she added.

The US contributes “woefully little” to early childhood education and care compared to other developed countries, the US Treasury Department noted in a September 2021 report on the supply-side economy. childcare services. As a result, parents have to bear the bulk of these expenses, according to the report.

In its Build Back Better plan, the Biden administration has proposed increasing funding for child care — including through subsidies to ensure low- and middle-income families pay no more than 7% of their income for childcare and through universal pre-school education. However, these efforts are far from certain, with Build Back Better at stake.

Some state governments are getting innovative. In North Dakota, the State Department of Human Services’ Division of Early Childhood Services used federal pandemic relief funding and issued $50 million in emergency operating grants in 2020 for child care providers. Last year he promised nearly $30 million to help child care providers meet operating expenses during the pandemic and a time of high inflation.

This year, the state plans to launch a new child care career path program to support things like training, certification, recruitment, and retention. This is in addition to ongoing efforts such as providing start-up grants for childcare businesses and offering childcare assistance for parents looking for work.

“I think [support for child care] is super critical,” said Kay Larson, Director of the Division of Early Childhood Services. “It’s hard when working parents don’t have a place they trust for their children to have an experience of quality early childhood and make them productive members of the workforce.”

About Mark A. Tomlin

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